1. What does the capacitors in the red rectangle do? I do not see the capacitors connect to other component.
2. can i use the frequency counter to display the pitch frequency? input to electret microphone then enter the frequency counter.

 

The capacitors are used as decoupling capacitors for the PIC. They supply the high frequency switching currents required by the PIC.

 

What you have here is a typical shorthand technique that is used in schematics. Labels are used rather than overt connections to lines on the schematic. This is done to cut down on the clutter that comes with having a bunch of lines on the schematic.

hgmjr

 

If you use an electret microphone then its level is so low that it needs a preamp circuit.